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Why Smart Texans Buy Health Savings Accounts

most important benefits to employees

Texas HSAThere are plenty of good Texas health insurance options that range from employer-sponsored plans to individual health insurance plans.  But with health insurance costs rising at rates far greater than increases in income, health insurance can be quite expensive. That’s exactly why more and more people are turning to Texas health savings accounts, which help consumers lower costs by putting them in charge of their health care spending.

A Texas HSA provides individuals and families with a method for saving money tax-free to use for qualified medical expenses.  Similar to an IRA or other investment, there are contribution caps to Texas HSAs.  As of 2010, the contribution limit is $3,050 for individuals and $6,150 for families, but this combination of insurance and investment accumulates year over year into a powerful asset that consumers can put toward doctor visits, prescriptions and preventative care.

To qualify for a Texas health savings account, you simply need to enroll in an approved high-deductible health insurance plan.  As of 2009, the IRS defines a high-deductible health insurance plan as any plan that has a minimum deductible of $1,150 for individuals and $2,300 for families, as well as a maximum out-of-pocket of $5,800 for individuals and $11,600 for families.  So rather than paying a  Texas health insurance company a large premium each month for coverage that may go unused, the consumer keeps more of his money and only dips into his Texas HSA when it’s necessary.  Plus, you, rather than an insurance company, get to choose where your money goes, whether that’s toward a doctor visit, dental or vision care, prescriptions or even alternative therapies, like chiropractic care.

A Texas health savings account has many other advantages besides reducing monthly premiums and expanding consumer choice.  All contributions and earned interest are tax deductible, and money put toward qualified medical expenses is also tax exempt.  Plus, as your Texas HSA grows, unused funds will roll over year after year, so if you stay relatively healthy, an HSA can be a great supplement to other savings accounts.  And once you reach age 65, you can withdraw your funds to be used however you wish, all without a penalty.

Another benefit of a Texas health savings account is its portability.  It goes where you go, regardless of employment status.  You can keep your funds even if you change jobs, lose your job or retire early.  This is true even if your employer was contributing to your HSA, which is in contrast to traditional employer-sponsored plans which end when your job ends.

Whichever Texas health insurance plan you choose, the most important thing is to get coverage and keep coverage.  But to save money and increase personal decision making about your health care, a Texas health savings account is an attractive option.

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